The law will allow the President of Brazil to designate or create a regulatory agency to oversee the crypto market.
The bill regulating the cryptocurrency market in Brazil is expected to be approved by the National Congress in the first half of this year, according to Cointelegraph Brazil.
The legislation, which has been debated in the Chamber of Deputies since 2015, has been approved in the first round of consideration. The Senate has attached it to another crypto-focused bill, which has already been approved by the Economic Affairs Committee of the Senate.
Two legislators, Senator Irajá Abreu and Deputy Aureo Ribeiro, both rapporteurs of the aforementioned proposals in their respective legislative chambers, are drafting a unified text of the bill that will be sent to the full Senate vote.
“I’m doing everything in contact with the Chamber’s rapporteur, who did a very good job. The Central Bank’s technical team has also been very helpful. The texts are similar and converged into one”, said Senator Irajá.
Irajá also pointed out that the president of the Senate, Rodrigo Pacheco, is expected to put the unified bill to an April plenary vote. He said:
“By joining the projects together, we accelerated the approval of this cryptocurrency milestone. There is a market demand for a safer business environment and the need for criminal classification to avoid fraud, in addition to adjusting Brazil to international agreements.”
The approval of the law in plenary will not make Bitcoin legal tender in Brazil as it does in El Salvador.
The proposed law would allow the Brazilian President to determine a federal entity responsible for establishing rules for cryptocurrencies. The president would either create a new regulator or delegate this function to the nation’s Securities and Exchange Commission (CVM) or the Central Bank of Brazil (BC).
The regulator will be responsible for defining market guidelines and establishing norms in line with international standards to prevent money laundering and concealment of assets.
The bill also proposes a penalty of four to eight years in prison, in addition to a fine for those who commit fraud in the provision of virtual asset services.
Another point highlighted in the bill is a set of incentives for crypto miners to set up shop in Brazil. It proposes to exempt the import of ASICs to the country from taxes. However, this could not be enough to lure Bitcoin miners into the country, provided that energy rates in Brazil are among the highest in South America and about 5 times higher than in nations like Paraguay and Venezuela.